Wednesday
2/18/2009 11:06:00 PM

We must quickly develop low-cost renewable and efficient energy technology to avoid the devastating effects of climate change. This requires a strong financial commitment to clean energy research, development, and demonstration (RD&D) to achieve big breakthroughs.

Historically such funding has been anemic. After a peak in 1978 of $7 billion, U.S. government funding for energy RD&D dropped by more than 70%. Corporate RD&D fell even more, and funding in the early 2000s totaled just 0.3% of sector revenue, compared to 15% in the biotech sector. Is it any wonder the energy sector has struggled to make progress?

What level of energy RD&D funding is needed? Kammen and Nemet look at several different metrics and suggest that a sustained level between $20-40 billion is needed to reinvigorate the field. Recent activities push in the right direction: 2008 funding reached $3 billion, 50% higher than during the early 2000s, and the stimulus bill recently signed into law adds $3.25 billion in new RD&D funding for clean energy. But to have a truly transformative effect, investment needs to climb even higher.

In addition, without emphasizing the "R" in RD&D, we will produce only incremental improvements. We need to prime the innovation pump in order to produce more high-quality ideas that produce radically better (and cheaper) technologies. This will provide long-term job growth, and also increase consumers' buying power, stimulating the economy.

Funding must also be coupled with long-term demand for clean technology. This gives companies confidence their investments will pay out, and assures students entering the field that jobs won't evaporate. Research must also focus more on clean tech; in recent years only 40% of energy RD&D funding has gone to renewable energy and energy efficiency.

At Google we've learned some that might be successfully applied to energy:

"Put the user first and all else follows." For instance, customers care about saving money, but only if it's easy to measure. Providing ways to cheaply monitor energy consumption is a powerful first step.

"Great just isn't good enough." Cost-parity for renewables is required for long-term competitiveness, but to replace conventional technology we must develop renewable electricity cheaper than coal, the least expensive fossil fuel.

"Launch early and often." Instead of waiting for perfection, get new technologies into the marketplace quickly, then improve through iteration.

These strategies will make sure that the widest possible set of ideas are considered, increasing the number of breakthroughs. A "fail fast" policy would allocate people to the great ideas, with high-impact results guaranteeing continued funding, particularly at the critical demonstration stage where many technologies fail to attract sufficient capital. Carrying projects over this "Valley of Death" to full commercialization will ultimately result in the best, lowest-cost technologies rapidly reaching the market. For the sake of the planet, clean energy can't arrive soon enough.